Reference no: EM131476552
Use the spreadsheet (attach) to record answers.
2014 -
February 1 - Brady and Manning decide to start up a partnership. Brady brings in $10 000 cash and equipment costing $60 000, with $17 000 in the accumulated depreciation account. The fair market value of the equipment is $37 000. Manning brings $54 000 in cash. They agree to an income ratio of 5:4.
December 31 - The business records a net income of $24 000, and Brady has a debit balance of $16 000 in his drawings account.
a) Record the journal entry to establish the partnership.
b) Record the entry to allocate the net income to the partners' capital accounts.
c) Prepare a Statement of Partners' Equity for 2014.
2015 -
January 1 - McNabb joins the partnership by contributing $46 000 in cash. A new partnership agreement is drawn up. Brady, Manning and McNabb agree to salaries of $5 000 for each partner and a 5:4:3 income ratio.
December 31 - The business recorded a net income of $30 000. Brady had drawings of $20 000 and Manning had drawings of $4 000.
a) Record the entry to admit the new partner into the business.
b) Record the entry to allocate the net income to the partners' capital accounts.
c) Prepare a Statement of Partners' Equity for 2015.
2016 -
January 1 - Manning decides to leave the partnership. McNabb agrees to pay Manning $73 000 in a private transaction for his entire share in the business. The result is that all of Manning's equity will be transferred to McNabb. The income or loss will now be divided equally (50-50) between Brady and McNabb. There will be no salary.
December 31 - The business recorded a net loss of $46 000. There were no drawings. Show the entry to allocate the net income to the partners' capital accounts. Prepare a Statement of Partners' Equity for 2016.
a) Prepare the entry to record the departure of Manning.
b) Record the entry to allocate the net income to the partners' capital accounts.
c) Prepare a Statement of Partners' Equity for 2016.
2017 -
January 1 - The partners decide to liquidate the partnership. They have the following balances:
Cash $29,917
Accounts Receivable $4 500
Equipment $ 110 000
Accumulated Depreciation $ 25 000
Accounts Payable $ 4 417
The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $72 000.
a) Record all journal entries to dissolve the partnership.
When completing this liquidation, if your balance sheet does not balance because your capital balances are different, then adjust the cash figure to an amount that would allow the balance sheet to balance before you start the liquidation process.
Attachment:- Assignment File.rar